News

In line with complaints iLounge voiced in its review of the original version, Nike has quietly released an updated Nike+ Sport Armband for iPod nano featuring a clear window for the screen. Like the original, the updated version remains large enough to house both an iPod nano and a Nike+iPod Sport Kit receiver, and is still made from Nike Pro Compression fabric. The Nike+ Sport Armband is available now for $29.

Microsoft CEO Steve Ballmer continued his anti-Apple press campaign in a recent interview published by USA Today. Responding to a question about passionate Apple customers, Ballmer jokes about Windows/Mac market share numbers and goes on to say that there is “no chance” the iPhone will gain traction. Ballmer also said the game isn’t over when it comes to portable media players.

“There’s no chance that the iPhone is going to get any significant market share. No chance,” Ballmer said. “It’s a $500 subsidized item. They may make a lot of money. But if you actually take a look at the 1.3 billion phones that get sold, I’d prefer to have our software in 60% or 70% or 80% of them, than I would to have 2% or 3%, which is what Apple might get.”

“In the case of music, Apple got out early,” Ballmer continued. “They were the first to really recognize that you couldn’t just think about the device and all the pieces separately. Bravo. Credit that to Steve (Jobs) and Apple. They did a nice job. But it’s not like we’re at the end of the line of innovation that’s going to come in the way people listen to music, watch videos, etc. I’ll bet our ads will be less edgy. But my 85-year-old uncle probably will never own an iPod, and I hope we’ll get him to own a Zune.”

Sling Media has released SlingPlayer for Mac 1.0, new software for the company’s Slingbox device that enables users to view television content remotely on a Mac computer. The SlingPlayer software also claims to allow users to watch content from an Apple TV, as well as “Front Row, iPod in Apple’s Universal Dock or iPod in an iPod Hi-Fi.”

“With this software release, Slingbox owners can now view their television directly on their Macintosh computer screen,” says Sling Media. “With full remote control, they can watch content from their home entertainment system whether from cable, DVR, DVD and even a full range of Apple entertainment products including: Apple TV, Front Row, iPod in Apple’s Universal Dock or iPod in an iPod Hi-Fi.”

Apple will reportedly open its third Manhattan-area retail store in the city’s trendy Meatpacking district. The store, which could possibly be Apple’s largest yet, will be located at 401 W. 14th Street, according to the New York Post.

“Apple is leasing more than 32,000 feet on the cellar, ground and second floor of the 60,000-square-foot, low-rise structure,” the Post reports. “The former home to a Western Beef grocery store and Belgian restaurant Markt, the building where the new store will open is being completely renovated and getting a new 9,000-square-foot penthouse along with 2,500 feet of terraces overlooking the triangular intersection of Ninth Avenue, Hudson Street and 14th Street. High-end retailers Stella McCartney, Jeffrey and Alexander McQueen are among Apple’s neighboring retailers.”

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And finally, with over 65,000 views, iLounge’s own Bob Levens explains how to get the best out of in-canal earphones. Recently a fan of custom-made earmolds, you can read Bob’s tips from back in the days when he relied on little foam or rubber tips to enjoy music. “Thanks to this thread I got my Sennheiser CX300s to fit properly,” said forum member Ron519098. “The sound is now amazing.” Take a peek inside.

Griffin Technology is now shipping its two new iPod speaker systems—the Amplifi and Journi. The Amplifi ($150; iLounge Rating: A-) is an all-in-one 2.1 sound system with wood-based construction and acoustically tuned enclosure. It features a built-in iPod dock, 3.5mm (1/8”) input jack, and slim IR remote. Griffin’s Journi ($130; iLounge Rating: B+) is a portable speaker system featuring a protective Wrapstand exterior that flips open to create a stand. The Journi has an adjustable docking bay, wireless remote, and internal Lithium-Ion batteries that can be recharged with the included AC adapter or through a powered USB port.

Apple’s Vice President for Europe, Pascal Cagni, confirmed plans to offer films on the iTunes Store in Europe before the end of the year during an interview with French business publication Les Echos. Cagni also confirmed a fourth quarter launch of the iPhone in Europe, as well as future plans for an Apple retail store in Paris, France. In addition, he revealed that Apple has plans for approximately 70 sales outlets to appear in larger retail stores in Europe by the end of 2007.

Apple has reportedly begun pursuing higher quality and DRM-free music from labels and artists, which may be available alongside the much-publicized EMI offerings. According to a report, Apple notified iTunes partners yesterday, informing them that the store will soon offer higher quality music without copy protection restrictions.

“Many of you have reached out to iTunes to find out how you can make your songs available higher quality and DRM-free,” Apple said in the email. “Starting next month, iTunes will begin offering higher-quality, DRM-free music and DRM-free music videos to all customers.”

Apple’s email appears to signify that any content publisher can sell higher quality and DRM-free music and music videos on the iTunes Store. As previously reported, DRM-free tracks from artists and bands signed to EMI will be available on iTunes starting next month for $1.29 per song.

Students using iPods and similar devices to cheat on exams is a growing problem, according to teachers. To combat the phenomenon, schools have begun banning the devices in the classroom. “Banning baseball caps during tests was obvious—students were writing the answers under the brim. Then, schools started banning cell phones, realizing students could text message the answers to each other. Now, schools across the country are targeting digital media players as a potential cheating device,” reports the Associated Press. “Devices including iPods and Zunes can be hidden under clothing, with just an earbud and a wire snaking behind an ear and into a shirt collar to give them away, school officials say.”

Apple’s new subscription accounting policy for the iPhone and Apple TV could be a sign of things to come for the company, according to one analyst. Shaw Wu of American Technology Research told clients today that he envisions Apple offering subscription services for music, TV, movies, and video games. “We believe Apple is in the midst of building a more serious effort in the subscription business where it could enter the ‘rental’ space with video games and music, TV, and movie content,” Wu said. “We would not be surprised to see Apple compete with the likes of Netflix and Blockbuster in a bigger way.” These services would make Apple the “only vertically integrated play and one stop shop for hardware, software, and services for the digital lifestyle,” according to Wu.

Apple’s iTunes Store is now offering select performances from American Idol’s charity event Idol Gives Back. A message on the Idol Gives Back site reads, “iTunes has come together with Idol Gives Back to show how digital music and video support this cause. Much of the show will be available for download afterwards, so you can be part of this amazing event. iTunes will pass all net proceeds from the sale of Idol Gives Back content to the event’s charity-CPEF (Charity Projects Entertainment Fund). For all visitors to iTunes from the americanidol.com site from now until May 23rd, an additional percentage of your total iTunes purchases will go to CPEF.” Currently available videos range in price from $1 to $2.

Following better than expected quarterly earnings, shares of Apple soared above $100 to hit a new all-time high. As reported late yesterday, Apple saw second quarter earnings come in at $770 million, or 87 cents a share, compared to earnings of $410 million, or 47 cents a share, last year. Analysts were expecting, on average, earnings of 64 cents a share on revenue of $5.17 billion for the quarter. During the quarter, Apple shipped more than 10.5 million iPods and more than 1.5 million Mac computers.

Ahead of contract re-negotiations with record labels, Apple CEO Steve Jobs indicated he is unlikely to heed calls for a subscription-based iTunes music service. “Never say never, but customers don’t seem to be interested in it,” Jobs told Reuters. “The subscription model has failed so far.” Jobs reaffirmed that “people want to own their music.” Jobs also said that, following EMI’s lead, the other major record labels are considering dropping copy-protection on their music offerings. “There are a lot of people in the other music companies who are very intrigued by it,” Jobs said. “They’re thinking very hard about it right now.”

“We’re doing very well outside the U.S. We’re now over 60% in Australia and Canada,” said Cook, citing over 50% share in Japan and now Hong Kong, “in the 40-50 range in the UK, Switzerland, Singapore, and Denmark. We hit a high in Germany of 28% in the most recent numbers. And so, pretty much everywhere you look on a year-over-year basis you would see really good progress.”

In response to an inquiry on Apple’s lagging overall performance in Japan, Cook noted that “it’s a very challenging market for us. In terms of iPod and the MP3 market, we’ve maintained an over 50% share for some time,” but said that “the MP3 market itself isn’t growing.” According to Cook, Japan “is literally the only market in the world that we’re not doing well in, and it is very frustrating.”

During Apple’s second-quarter 2007 financial results conference call, Apple CFO Peter Oppenheimer disclosed that Apple has adopted a new accounting policy in order to provide ongoing software feature and application updates for both Apple TV and the iPhone.

“We believe the iPhone is a revolutionary device that is years ahead of the competition,” said Oppenheimer. “We plan to build on this incredible foundation by continuing to develop new software features as well as entirely new applications, and incorporate them into the iPhone. And since iPhone customers will likely be our best advocates for the product, we want to get them many of these new additional features and applications at no additional charge as they become available.” Consequently, the company will account for each iPhone’s revenue over a subscription-style 24-month period rather than all at the time of sale. A similar statement was made regarding future Apple TV features.

Updated: In response to an analyst’s inquiry as to why Apple TV would be placed on a subscription accounting model, given that no subscription is required for the device, Apple stated again that it was looking at a number of new features for Apple TV, but did not specify what they would be. The analyst questioned whether this was a prelude to a subscription package for Apple TV content, and was not directly answered.

Reporting its second quarter financial results today, Apple said it shipped 10.549 million iPods during the quarter—slightly below some analyst predictions, but a 24 percent increase compared to the same quarter last year. The company posted revenue of $5.26 billion and net quarterly profit of $770 million, or $.87 per diluted share, compared with revenue of $4.36 billion and net quarterly profit of $410 million, or $.47 per diluted share in Q2 2006. Sales of Other Music Related Products + Services were up 35% over last year’s quarter and 3% over the last quarter of 2007, to $653 million total. That category includes iTunes Store sales, iPod services, and revenues from Apple and third-party iPod accessories.

“The Mac is clearly gaining market share, with sales growing 36 percent—more than three times the industry growth rate,” said Steve Jobs, Apple’s CEO. “We’re very excited about the upcoming launch of iPhone in late June, and are also hard at work on some other amazing new products in our pipeline.”

“We are very pleased to report the most profitable March quarter in Apple’s history,” said Peter Oppenheimer, Apple’s CFO. “Looking ahead to the third fiscal quarter of 2007, we expect revenue of about $5.1 billion and earnings per diluted share of about $.66.”

Analysis of the company’s figures showed significant double-digit year-versus-year growth in all regions in which Apple operates, except for Japan, which experienced single-digit declines versus the year-ago quarter, and a modest decrease in revenue relative to the prior 2007 quarter.

Updated: During Apple’s Financial Results Conference Call, Apple revealed that iTunes controls 85% of the U.S. market based on the latest data from Nielsen Soundscan. Peter Oppenheimer, Apple CFO, added: “iPods accounted for 44% of total revenue during the quarter… iPod shuffle was especially popular” based on the release of four new colored shuffles in early 2007. Apple also reaffirmed the timing of iPhone outside the US. Europe will see it in the fourth calendar quarter of 2007, and Asia in 2008.

Apple has posted offers for iPhone service representatives, both on its job site and on AfterCollege.com. Training for the positions will begin in May; duties include handling questions on both hardware and software, as well as troubleshooting GPRS/EDGE, Wi-Fi, and Bluetooth problems.

Samsung has announced the SpinPoint N2 120GB 1.8-inch drive, which is the same size as the drives used in hard drive-based iPods. It is unknown whether Apple will adopt the drive for future products; production of the SpinPoint N2 begins in July.

Following the announcement of an online lyrics collaboration between Yahoo! Music and Gracenote, Gracenote CEO Craig Palmer’s comments caused speculation that iTunes will soon offer a similar service. “We wouldn’t be in the business to launch just one service, so stay tuned,” said Palmer.

The new George Foreman iGrill is a floor-standing, iPod-ready indoor/outdoor electric grill. Offering a 200-square-inch grilling surface with “George’s Tough Nonstick Coating,” the iGrill sports a 10-watt speaker system that plays music from a connected iPod, MP3 player, or USB device. The iGrill sells for $150.

Mac game publisher Aspyr has released iQuiz Maker, a new Mac OS X application that allows users to easily create custom quizzes for the new iQuiz iPod game. “iQuiz Maker lets you write your own True or False and multiple choice questions and choose themes to customize the look of your quiz. Add a new group, add a quiz, type in your questions, select your answers—even write the messages players see when they win or lose. You can have your own quiz up and running in minutes. And when you’re done, you can save your quiz and share it with friends.” In addition, Apple has posted detailed instructions on how to create iQuiz packs from scratch. “If you want to go above and beyond what iQuiz Maker has to offer, you can create your own quizzes using a simple .txt file, game tags, and a set of custom .tga images,” says Apple.

The U.S. Securities and Exchange Commission has filed a federal lawsuit against two former Apple officers, charging that they helped to illegally backdate company stock options. Former Apple general counsel Nancy Heinen and former Apple chief financial officer Fred Anderson were both named for their roles in backdating going back to 2001. Heinen’s case will proceed, while Anderson has settled for $3.5 million in fines and penalties.

“Apple’s shareholders relied on Heinen and Anderson, as respected legal and accounting professionals, to ensure the accurate reporting of the company’s executive compensation,” the associate regional director of the SEC’s San Francisco office said in a statement. “Instead, they failed in their duties as gatekeepers and caused Apple to conceal millions of dollars in stock option expenses.”

In an unexpected statement, Anderson partially blamed Apple CEO Steve Jobs for the backdating complaint against him. “Fred was told by Steve Jobs in late January 2001 that Mr. Jobs had the agreement of the Board of Directors for the Executive Team grant on January 2, 2001,” Anderson said. “At the time Mr. Jobs provided Fred this assurance, Fred cautioned Mr. Jobs that the Executive Team grant would have to be priced based on the date of the actual Board agreement or there could be an accounting charge. He further advised Mr. Jobs that the Board would have to confirm its prior approval in a legally satisfactory method. He was told by Mr. Jobs that the Board had given its prior approval and the Board would verify it. Fred relied on these statements by Mr. Jobs and from them concluded the grant was being properly handled.”

The SEC said it will not pursue any further action against Apple itself, citing the company’s “extraordinary” cooperation. “Apple’s cooperation consisted of, among other things, prompt self-reporting, an independent internal investigation, the sharing of the results of that investigation with the government, and the implementation of new controls designed to prevent the recurrence of fraudulent conduct,” the SEC said in a statement.